How Design Turned Airbnb From A Dying Startup To A Billion Dollar Business

Created January 30, 2019 Companies Succeeding with Design

10 years ago, it wasn't clear whether Airbnb would survive as a startup.

How did Airbnb transform from a failing startup to a Star in its industry? Design helped.

 

Airbnb is an online marketplace that connects travellers seeking affordable places to stay with people looking to rent their homes or spare rooms.

In 2009, During its first year of business, the founders faced a well-known challenge of growing their users. At one point the company was earning a mere $200 a week.
Then, Airbnb was part of Y Combinator, (a Company that provides seed funding to startups), and their revenue was very low.

One afternoon, the team was pondering over search results for their New York City listings with Paul Graham (a venture capitalist and co-founder of Y Combinator). They were trying to figure out what wasn’t working and why they weren’t growing.

Paul Graham gave out a simple suggestion:

travel to New York, rent a camera, spend some time with customers listing [their] properties, and replace the amateur photography with beautiful high-resolution pictures.

So, the team members flew out to New York to meet Airbnb’s customers who were listing properties on the site. While there, the team took their own high-quality pictures which they then placed on the website. The result? A 100% increase in revenue ($400).

 One of the profound insights of this story is how instead of focusing on scalability, the team turned inward and asked ‘what does the customer need?’.

By applying the design thinking methodology of empathy to their business, Airbnb was able to climb out of the dark tunnel.

Lessons to Learn

Airbnb is incredibly customer-centric. Like most companies they are data-driven, however, they aren’t ‘pushed around’ by data. The company starts with a ‘creative hypothesis based on data and then tests it to see how it affects the business. The results lead them in the direction they should go.

In the words of Joe Gebbia, Co-founder and Chief Product Officer of Airbnb.

I'm not sure how user data is if you don't have a meaningful way to test it against.

Airbnb is known for testing ideas in the real world context, so they are able to truly see if it works or not. New employees go on a compulsory trip a week or two into their arrival at the company where they have to stay in an Airbnb, so they are able to see things from a customer (or guest’s) perspective. Having an understanding of this enables them to build solutions that are not only user-centred, but that positively impacts the company.

How Can You Use This in Your Business?

1.  Become the 'Patient'
You have to ‘walk in your customers’ shoes or in words of Gebbia, “become the patient’’.

Get into their space, live their life. It has been proven that doing this brings to light issues that would otherwise be hidden. Empathy for one’s customers also opens the door to more out-of-box (innovative) solutions.
Contact us to learn how your company can begin to take these steps.

2. Test, Test and Test some more!
Airbnb is known for continually testing, adapting and improving their user experience. They do this by talking to both visitors and hosts about their experiences and experimenting to find out what works and what doesn’t.

  • Oluchi Orji

    Digital Marketing Personnel

    I love the digital space and love helping businesses grow online.

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